Many taxpayers have over the years fallen into the trap of waiving a right in favor of a third party without considering the full extent of the tax consequences of their actions. Not only is it necessary for taxpayers to be aware of the potential donations tax implications, but it is also necessary to consider whether any capital gains tax (“CGT”) implications arise as a consequence of their actions.
Tag: CGT
Realization companies and nature of proceeds received for tax purposes
The Supreme Court of Appeal delivered judgment on 10 May 2011 in the case of Founders Hill (Pty) Ltd v the Commissioner for the South African Revenue Service (Case No. 509/10) (as yet unreported) which dealt with the capital versus revenue nature of proceeds received by a realization company that acquires land in order to dispose of it.
Capital gains tax relief on certain foreign currency gains
The Draft Taxation Laws Amendment Bill, 2011 (Bill), proposes to delete Part XIII from the Eighth Schedule to the Income Tax Act (Act). Part XIII deals with the taxation of realised gains and losses in respect of foreign currency assets and liabilities in monetary form, such as foreign currency or debts in foreign currency. It only applies to persons to whom section 24I of the Act does not apply.
The importance of residence in determining liability for capital gains
The case of TLD Limited v The Commissioner for the South African Revenue Service heard before the Tax Court raises the interesting issue of the interplay between the imposition of capital gains tax in the context of the Eighth Schedule to the Income Tax Act and the application of a Double Tax Agreement.
Capital gains tax and trusts: is there a pipe?
Rene Magritte (1898 – 1967), the Belgian Surrealist artist, painted a smoking pipe and below it the words “Ceci n’est pas une pipe” (“This is not a pipe”). And, of course, the painting of the pipe isn’t a pipe; it is an image of a pipe. In South African tax law (which may also seem surreal at times) there is